Fantasy CEO – Round 3 Annual Report

How worrying is it that I was exchanging emails and spreadsheets with a complete stranger called Shane at 5.50 on Saturday morning? Hopefully he was emailing from Hong Kong or Sydney. He has harvested the first two rounds of results from the Times website. (Only registered players can log in – everyone else is limited to the table of averages).

A couple of unexpected things appear to come out the data.

Firstly there were only about 470 participants in Round 2, but not everyone who dropped out of Round 1 did badly: the drop-outs are spread remarkably evenly throughout. The chap who had over $5m profit in the first round has left us – maybe he decided to take the virtual dollars and run. I’m curious why people who were doing well dropped out – didn’t they realise how well they were doing, or did they decide their time was better spent being good at their real businesses? Or maybe their partners had had enough and unplugged their PCs.

Also, scores can go down as well as up: the people in the top 10 places at the end of Round 1 who are still in the game scored as follows in Round 2:

Round 1 Place

Round 2 Place

Dropped out

1st

191

–

2nd

39

–

3rd

1

–

4th

458

(dropped out)

5th

463

(dropped out)

6th

55

–

7th

75

–

8th

466

(dropped out)

9th

3

–

10th

16

–

11th

20

–

12th

51

–

13th

468

(dropped out)

14th

467

(dropped out)

15th

44

–

From 1st to 191st is a pretty dramatic drop, and you see what I mean about the drop-outs being evenly spread? The top 10 scorers in Round 2 came from all over the field and their scores in Round 1 were:

Round 1 Place

Round 2 Place

3

1st

47

2nd

9

3rd

63

4th

152

5th

18

6th

132

7th

290

8th

190

9th

100

10th

The ranking in the early rounds may be volatile but it’ll stabilise pretty soon I’m sure. If it was actually raining outside I’d be tempted to analyse the data to find out what the average change from Round 1 to Round 2 was, but there are weeds in the garden which need pulling up by the roots.

I’m not saying where I am in this whole thing, but I went into Round 3 feeling rather pleased because my ranking in the league had improved even though I’d fallen behind one of the five robot players I’m competing with in the simulation.

The Times tell us the final league table will be based on the Balanced Scorecard, which is how Shane and I have been ranking the players.

A brief aside here: the Balanced Scorecard was devised by Robert Kaplan and David Norton to help companies tune and track their progress in ways that aren’t just dollars and cents. For example, if being green is important to a company and it uses recycled paper even though it is more expensive, then its “sustainability” score goes up balancing out the fact that the “profitability” score goes down. The Balanced Scorecard is there to stop the lunatics, sorry, to stop the accountants taking over the asylum. In practice, I think it may just give them a wider range of beans to count.

So I spent most of Friday plonking my way through the tutorial to discover how to predict which way my customers will jump. In the end it still seemed to come down to licking my finger and holding it up in the wind so I am not convinced they were hours well spent, though I may have been using better informed lick.

Then on Saturday I checked my decision-making against the Balanced Scorecard. This forced me to undo various decisions I made last week – for example I’d made the production lines too big and I’m clearly not going to sell all the product I can currently make. I’m glad I’d doing this on my own, I’m not fond of recriminations and acrimony. I reached the point a couple of times where my decisions all seemed to balance out – if I spent more on marketing my “awareness” score went up but my “profitability” score went down. After bringing it up from about 34, I stalled with a predicted score of 43 until I realised that borrowing is good so long as your profits outweigh the interest charges, (think “buy-to-let”) and after that my predicted score climbed to the mid 50s where it stalled again.

One thing this has reinforced is the danger of relying on assumptions and not planning for things to go wrong. If you assume you will sell 1000 widgets and leave no room for selling fewer or more, then you’ll end up in deep doo-doo if your customers only want 500 or if they want 1500. It’s intuitive enough that you’ll be stuffed if you make 1000 widgets and only sell 500 because your fixed costs like staff, rent and insurance stay the same and your income’s gone down. However it’s not as intuitive that only having 1000 widgets if your customers want 1500 will stuff you too, in this case over-time will eat up your profits and if you run out of stock completely as I did in Round 1, you’ll just hand your competitors over to your customers on a plate – in real life you’d never get them all back.

So how did Aphra Inc do in Round 3? AT first sight it looks as if I’ve been over-cautious again; I am certainly solvent, but I could have sold more widgets than I made. This is often described as “a nice problem to have” but in reality it’s still a problem and it means I’m not accurate enough with my forecasting.

My investment in marketing and sales activities is paying off, and the decisions I make are doing a good job of making my original strategy happen. I am pleased to know that I can have a vision of what sort of company Aphra Inc should be, and make the decisions that makes that happen in our little simulated on-line world.

The differences between my predicted results and my actual results this Round show that my financial decisions and marketing decisions were better than predicted, but running out of stock damaged my overall score. The Times have not yet updated the scores published on their results page, so it’s impossible to tell where I rank among the remaining players.

The phrase “could do better” is ringing in my head.

Onwards and onwards.

PS – I’m not the only one focussing on the Balanced Scorecard, The Times today have written up the Balanced Scorecard up in today, with a mention of this very blog!

22 responses to “Fantasy CEO – Round 3 Annual Report”

another round is gone and i have started to get it. i have wasted a lot of money in R&D for products that cant be sold because they are not on the map of high or low segments. Stupid, i wanted to get to the niche markets. i should have read the instructions earlier.
about the results, anyone knows where i can see the rankings. i can only see the the list people in a random not ranked.
and about the other 5 players in the group… are they real??
keep up the good work!!

I’ve decided to ignore the rankings from now on. I’ve spent ages copying and pasting the 13 pages of results into a spreadsheet and sorting it in every imaginable order, I’ve concluded that the rankings have some fairly fundamental flaws, ( see my comment on my previous post here: http://tinyurl.com/26myzw ).

The five other players aren’t real. We are all playing against the computer, which is probably the simplest way for them to make sure the playing field’s level.

Good luck with bringing yourself around, it’s a good game, but there is a huge amount to take in.

I have looked at the results and ranked according to total of the first four (balanced scorecard points) columns. If I sum these four columns I can get them to correspond to the totals of my completed rounds. I believe the remaining columns, profit etc. will play a part in the recap total at the end but I don’t think you can derive much from them at the moment.

The order the results are listed in may correspond to the order submitted or something. This must be deliberate. If people logged on and could easily see their place I am sure even more of the 3800 would drop out.

I played round 3 with the Balanced Scorecard in mind. Every decision I made was then tweaked to get as high a predicted score as possible. As I had previously sold out of product I upped my sales budgets and went with an optomistic sales prediction. Unfortunately my sales were lower than expected. This left me with a cash shortage and needing an emergency loan.
OK I managed the best score so far, but the knock on effect of the emergency loan, which has damaged my credit rating may cost me dearly. I have a new product launching this year and will have to do some creative accounting to fund it’s promotion, especially if I am to continue with aggressive pricing on my low tech product.

Nick, I’m glad you couldn’t work out why they’re published in that order, because it makes me feel marginally less stupid. I hadn’t thought of the order submitted.

Fettling, it is thwarting, isn’t it? I’ve sold out two rounds in a row now, and got clobbered with “out of stock” penalties on the scorecard even though it didn’t put me in the black. Good luck with hustling up the cash for the new product.

Andre, the Times Rankings are confusing. See my comment here: http://tinyurl.com/26myzw Shayne and I concluded there were only 470 or so remaining players because the scores for a couple of hundred people had not changed between Round 1 and Round 2, while the scores for everyone else had gone up. The reason I know they haven’t updated the scores since Round 3 is because Shayne copied and pasted all 13 pages into a spreadsheet after Round 1, and then did the same after Round 2, and there’ve been no changes to the scores published since then.

I’ve emailed the Times with my concerns about the scores, and we’ll have to see what they do.

Is anyone clear about how they will determine the winner of this competition?
There are various references to ‘the highest overall score’, yet I am not sure what the definition of that is.
I have posted a question on the Times site, but 2 days later no hint of a response or comment from the Times.
I’ll be asking the Foundation helpline immediately following this and will report back if noone has been able to shed light in the meantime.

Jen I believe that the balanced scorecard will be used. Highest points win with a facility for tie-breaking. It has taken me the three rounds to suss that one out. By the way, this is a really good blog site, more info than the official one so thanks for the facility. Any ideas on what constitues a good number at the current moment?

I had a look at the new tables and am quite happy I’m doing OK (that is, if being within the top 100 merits the joy) since I don’t quite understand the scorecard, or the other results for that matter.
For instance, I’m supposed to have about 70% share of the market but my own results -the ones in which I only compete against the other 5 computer generated players- tell me that I’ve only got 30%.

Shane ,
This is the first time we ( a team of three ) are playing a game like this . We take lot of time before finalizing the decisions ( basically to get the maximum possible BSC score – 2 points , room for future rounds ). Also another imp tip is look at the future rounds expectations in terms of net profit and other parameters and prepare for the same atlease one round in advance. Also try to hit the max possible recap score i.e 240, so work back wards in terms of sales , netprofit , etc.